GPCI Decrease Offsets Positive Medicare Increase in Some Geographic Areas

The “Yo-Yo” Effect
Talk about a “yo-yo” effect of ups and downs surrounding the anticipated new Medicare Ambulance Fee Schedule amounts!  You’ll recall we Blogged several times about the Congressional battle that stood to interfere with the extension of the bonus payments.  We learned that the Ambulance Inflation Factor (AIF) would finally be a positive 2.4%. At the time that seemed like very good news!
Then our hopes were dashed for any increase when it appeared that Congress would allow the Ambulance bonus payments to expire.

This was followed by relief once again when Congress, at the last minute before adjourning for their holiday recess, decided to extend relief coupled with payroll tax relief through the end of February 2012.

Fallen GPCI’s Stifle Hoped-For Base Rate Increases
What we didn’t see coming, however, was the final decrease, in many areas, of the Geographic Practice Cost Index (GPCI-Physicians Expense) for 2012.  This index is compiled by the Federal Government each year and is calculated by considering regional differences in employee wages across the country, factors in median residential rents as a proxy for office/station rents/mortgages, includes employee wage data from the last Census and also takes into account professional liability insurance rates from reports provided by various State departments of insurance.

When the Feds put all these numbers together they arrive at a GPCI factor of 1.0 which is then considered equal to the “national average” of these numbers.  From there, the ambulance and physician fee schedule uses this value (either in excess of 1.0 or below 1.0) to calculate the regional differences portion of the national Ambulance Medicare Fee Schedule and the Physicians Fee Schedule.  The idea is for the Feds to build in a cost factor to the fee schedules and vary it regionally using the GPCI as a cost-to-do-business baseline.

GPCI Only Applies to Base Rates- Mileage has Increased
Without getting too technical, the GPCI only applies to base rate calculations for Ground Ambulance (ALS 1 Emergency/Non-Emergency, ALS 2, BLS Emergency/Non-Emergency, Specialty Care Transport and in New York State, the ALS Intercept Rate).  Mileage is not calculated with regional differences and is the same calculation across the nation, with the exception of differences between Rural and Non-Rural designated areas.  This means loaded ambulance mileage rates will increase by the expected 2.4% that we anticipated earlier.

That’s the good news in this confusing mess!

But, depending on what State and geographic area your ambulance trip originates in will determine if you realize an increase or actually see a decrease in those base rate payments and will those base rate decreases amount to overall reimbursement dollar losses for your organization?

Most States GPCI’s Decreased
A quick look at the newly released Calendar Year 2012 Ambulance Fee Schedule Public Use Files shows the GPCI’s in most States have decreased by fractional amounts.  So everyone in EMS is pretty much in the same boat.  One or two States will actually see an increase in the GPCI (Maryland is an example of a State that will realize a GPCI increase).

How Will This Affect My Ambulance Service
If your ambulance trip volume originates in States/Geographical Areas where the GPCI has fallen, expect to receive less reimbursement dollars for each of your base rates.  The expected 2.4% was added to the Base Value of an ambulance trip, but was then offset negatively in the regional GPCI calculation for the affected States.

But, you will see more in mileage on that same trip.  So depending on the amount of miles you travel with a patient in the ambulance, you may find that the mileage increase will offset the base rate decrease in payment.

For example, in Pennsylvania’s non-city areas which includes most of the State, the rural BLS Emergency base rate approval amount will decrease from the current $335.01 per trip to $331.92, a loss of $3.09 per trip (about 9/10ths of 1 percent less).  However, because the trip originates in a rural zip code in our hypothetical example, that same trip will find the first 17 loaded miles being approved for $10.65 per mile instead of the current $10.40 per mile, an increase of 25 cents per mile.  If your trip is 15 miles long from point of pick-up to the hospital, you’ve just offset the lesser base rate reimbursement by seeing your mileage paid at a higher rate.  For trips in excess of 17 miles, you may wind up receiving even more reimbursement in the end for that particular trip.

 After 17 loaded miles, the mileage rate has increased by 17 cents per mile across the board in urban, rural and super rural areas which factors in even more additional dollars, given the driving distances in the most rural areas.

But those ambulance services that only transport a few loaded miles for each ambulance run, will stand to lose money on each trip as compared to last year, given the GPCI decrease’s affect on base rate payments.

Disappointing Now, Possibly Concerning Later?
While we had hoped to realize an increase for the first time in a few years, finding the GPCI’s had fallen put a real dampener on our 2012 expectations for our ambulance client friends.  However, with the bonus payments’ staying in place over the next two months, thanks to that last minute Congressional decision, the affect is much less than it would have been had those payments been dropped.

However, if those bonus payments do expire and Congress does not extend them past the end of February, then an additional blow will be felt in the ambulance community that we believe will have far reaching financial implications for many ambulance services beginning in March.

We’ll Keep You Updated
Keep watching our Blog for more updates.  Enhanced Management Services will keep our clients updated on specific dollar changes as we learn the actual calculations in each of the geographic areas we serve.  If you’re not an Enhanced client and your billing company hasn’t kept you updated on this and other hot topics such as the changing signature landscape and HIPAA 5010 updates, then give us a call today to talk to us about how you can become an Enhanced client and stay in the know!

Congress Extends Ambulance Relief for Two Months

It passed! President Obama Expected to Sign
Legislation has passed temporarily extending ambulance claim bonus payments that were set to expire in a week.

President Obama is expected to sign the bill into law today.  For at least two months, the bonus payments will remain in place and thanks to the positive adjustment in the Ambulance Inflation Factor, all segments of ambulance providers will see an increase of +2.4%.

The legislation rode on the coattails of the “payroll tax holiday” which will benefit all workers with extra dollars in their paychecks.

Relief for now
As we all know, the ambulance industry suffers from underfunding by at least six percent by the Federal Governments own admittance.  This temporary extension, with hopefully a permanent fix to come at the end of the two-month period, is a great relief for the ambulance industry.  Many of our ambulance clients were facing the second Medicare decrease in as many years without this stop-gap measure at a time when the industry is experiencing tight operating margins due to continually rising costs and a weakened charitable giving environment due to the overall state of the economy.

Thank Your Legislator!
During the Holiday break, many legislators will be visiting their home districts.  We advise you to reach out and say “thanks” to your Senator and Representatives.  During that discussion, you have a great opportunity to educate them how vital the passage of a permanent fix is to your operation and the overall status of the EMS community, nationwide.

New Approval Amounts to Follow
As soon as the new Medicare Ambulance Fee Schedule amounts are announced we will notify our clients.  Keep watching this Blog space for further updates and clients can also expect a notification by e-mail of breaking developments.

Enhanced Management Services acknowledges and is appreciative of the efforts of the American Ambulance Association along with continued guidance from our friends at Page, Wolfberg and Wirth for their continued guidance and notifications on this and other timely industry issues.